Panel on Security (Minutes) 4 March 99

Legislative Council

LC Paper No. CB(2) 1887/98-99
(These minutes have been seen
by the Administration)

Ref : CB2/PL/SE/1

LegCo Panel on Security

Minutes of meeting held on Thursday, 4 March 1999 at 2:30 pm in Conference Room A of the Legislative Council Building

Members present:

Hon James TO Kun-sun (Chairman)
Hon Mrs Selina CHOW LIANG Shuk-yee, JP (Deputy Chairman)
Hon Albert HO Chun-yan
Hon LEE Cheuk-yan
Hon CHEUNG Man-kwong
Hon Gary CHENG Kai-nam
Hon Howard YOUNG, JP
Hon Andrew CHENG Kar-foo

Members absent:

Hon David CHU Yu-lin
Dr Hon LUI Ming-wah, JP

Public Officers attending:

Item III
Mrs Clarie LO: Commissioner for Narcotics
Ms Mimi LEE: Principal Assistant Secretary for Security (Narcotics)
Mr Henrique KOO: Chief Superintendent
Narcotics Bureau
Hong Kong Police Force
Mr Gareth WILLIAMS: Superintendent
Narcotics Bureau
Hong Kong Police Force
Mr CHAN Hon-kit: Senior Superintendent
Customs Drug Investigation Bureau
Customs & Excise Department
Item IV
Mr Philip CHAN: Principal Assistant Secretary for Security E
Mr Spencer FOO: Regional Commander Marine
Hong Kong Police Force
Item V
Mr SO Kam-shing: Principal Assistance Secretary for Security D
Mr CHEUK Koon-cham: Assistant Director of Immigration (Administration and Planning)
Immigration Department
Mr MAK Kwai-yun: Assistant Director of Immigration (Liasion and Support)
Immigration Department
Mr KWAN Pak-lam: Deputy Director of Architectural Services
Architectural Services Department
Mr Peter YUEN Ka-tat: Chief Architect
Architectural Services Department
Mr Sidney Gary CROW: Chief Project Manager
Architectural Services Department

Clerk in attendance:

Mrs Sharon TONG: Chief Assistant Secretary (2)1

Staff in attendance:

Miss Betty MA: Senior Assistant Secretary (2) 1

I. Confirmation of minutes of meeting
(LC Paper No. CB(2) 1375/98-99)

The minutes of meeting held on 7 January 1999 were confirmed.

II. Date of next meeting and items for discussion
(LC Paper No. CB(2) 1374/98-99(01))

Items for discussion at the next Panel meeting

2. The Chairman informed the meeting that the Secretary for Security would need to undertake a duty visit on that day. As she would very much like to address members on the item on "Visa-free access for the Hong Kong Special Administrative Region Passport holders" personally, the Chairman agreed to defer the item to the next meeting.

3. Members agreed to re-schedule the next meeting for 31 March 1999 at 10:45 am and to discuss the following items -

Visa-free access for the Hong Kong Special Administrative Region Passport holders;
Measures to tackle the smuggling of cigarettes into Hong Kong; and
Policy on Closed Area permit.

(Post-meeting note : The item on "Policy on Closed Area permit" was replaced by "Office automation for Hong Kong Police Force".)

Items for discussion at future Panel meetings

4. Mr Albert HO expressed concern about a recent appeal case in the United Kingdom (UK) pending the ruling of the European Union (EU) Court. The appeal case was on whether a British overseas citizen would be granted full citizenship by EU. Should the ruling be in favour of the applicant, the applicant would be eligible to enter and reside in UK freely in the capacity of a EU citizen. Having regard to the implications of the ruling, he suggested that the issue be discussed by the Panel. Given that the judgment would not be handed down by the EU Court shortly, members suggested and Mr Albert HO agreed to provide a copy of the UK judgment for members' reference. Members agreed that the issue would be discussed if deemed necessary.

5. Mr Albert HO further said that he had received some complaints about the unduly long investigation time taken by the Commercial Crime Bureau of the Police. He considered that the Administration should review the manpower and the capabilities of the Commercial Crime Bureau. The Chairman suggested that the Administration be requested to provide information on the operation of the Bureau, the number of cases handled together with the average processing time taken and the number of successful prosecutions. Members might decide later whether it was necessary to follow up the issue.

III. Proposed amendments to Drug Trafficking (Recovery of Proceeds) Ordinance and Organized and Serious Crimes Ordinance
(LC Paper No. CB(2) 1374/98-99(02))

Briefing by the Administration

6. Commissioner for Narcotics (Com for N) took members through the information paper. The purpose of the proposed legislative amendments was to introduce requirements for money changers and remittance agents to adopt anti-money laundering measures.

7. Com for N said that money changers and remittance agents had been identified by the Financial Action Task Force on Money Laundering (FATF) as an important link in the money laundering chain. Under the existing legislation, all persons, including financial institutions as well as money changers and remittance agents, were required to report suspicious transactions in relation to possible money laundering offences. While financial institutions in Hong Kong were subject to statutory control under various ordinances and administrative guidelines issued by financial regulators, remittance agents were not regulated under any legislation. Although money changers were subject to the Money Changers Ordinance, the Ordinance aimed primarily to protect consumers and did not contain any specific anti-money laundering regulations. The Administration had issued administrative guidelines to money changers and remittance agents advising them to adopt anti-money laundering measures. It was found that although the majority of them did keep some information on their customers and transactions, the information was generally insufficient for the purpose of investigation into suspected money laundering operations. Against this background, the Administration proposed amendments to the legislation. The key features of the proposals were laid down in paragraph 9 of the information paper.

8. Com for N added that the Administration had consulted the industry, the Action Committee Against Narcotics and the legal professional bodies on the proposal. They all supported the proposals in principle.

Discussion

Penalty for breaching the statutory requirements

9. Mr CHEUNG Man-kwong considered that the proposed penalty imposed on money changers and remittance agents for non-compliance with the statutory requirements set out in paragraph 9(a) to (c) was too light to have deterrent effect. Given a lack of regulators in the trade, Mr CHEUNG expressed doubt about the effectiveness of the proposals. Com for N responded that administrative measures had been adopted to combat the problem of using money changers and remittance agents in money laundering operations. Amendments to the legislation were, however, considered necessary in the light of experience since the issue of administrative guidelines to the industry. Under the proposals, it was expected that sufficient information would be available for the purpose of investigation into suspected money laundering operations. The Administration was open minded on the level of fine and imprisonment term. The proposed penalty was on a par with other offences related to drug trafficking or dangerous drug trading. She added that should money changers and remittance agents fail to report money laundering activities, they were liable to a fine and imprisonment on conviction under the existing legislation.

10. Noting from paragraph 6 of the informaiton paper that the average amount of money dealt with by the remittance agents was about $830,000 per transaction per day, Mrs Selina CHOW said that the increasing use of remittance agents in money laundering operations was probably due to a lack of control over remittance agents. She was of the view that a more stringent control should be imposed on the industry. The Chairman echoed with Mrs CHOW's view that the proposed penalty was too light.

11. Chief Superintendent (Narcotics Bureau) /Hong Kong Police Force (CSP(N)) said that according to the findings of a survey on the practice of the industry, the number of transactions dealt with by the remittance agents ranged from two to about one hundred transactions per month. The amount of money involved ranged from $100,000 to over $360 million per month. Thus, an average of about $830,000 per transaction per day was calculated.

12. Having noted members' views, Com for N undertook to further consider the penalty for breaching the statutory requirements.

Adm

Criteria adopted for setting the threshold

13. In response to Mr Howard YOUNG's enquiry about the criteria adopted for setting the threshold at $20,000 for both money changers and remittance agents, Com for N said that the Administration proposed the threshold to be set at $20,000 after taking into account overseas legislation and local operational experience. The other key consideration was to avoid causing too much unnecessary disruption to the trade. Mr Howard YOUNG opined that in order not to cause too much inconvenience to the tourists, the Administration should set the threshold at a reasonable level having regard to the average amount per transaction of the tourists. The Chairman pointed out that if any persons intended to use remittance agents in money laundering operations, a threshold of $20,000 could still enable such operations. Com for N responded that the Administration might further consider the threshold.

Adm

Enforcement of the regulatory mechanism of remittance agents

14. Mrs Selina CHOW questioned how the Administration could ensure that the remittance agents would comply with the notification requirement stipulated in paragraph 9(e) of the information paper, given that there was, at present, no legislation and licensing system to regulate the remittance agents. Mr Andrew CHENG also expressed concerned about the enforcement of the regulatory mechanism.

15. In response, Com for N said that FATF had no specific requirements on how to regulate the operation of money changers and remittance agents in accordance with local circumstances. The modes of regulatory mechanism varied amongst FATF members. Given remittance agents were not regulated under any legislation at present, the proposal to require remittance agents to notify a public officer of their existence was already an important step forward. Under the proposed legislation, a definition of remittance agent would be provided. It would be an offence for remittance agents not to notify the designated public officer, appointed by the Secretary for Security, of their existence. The Joint Financial Intelligence Unit which was jointly staffed by the Police and the Customs personnel was the central unit for receiving suspicious transaction reports in the form of disclosure in Hong Kong. Upon the enactment of the proposed legislation, this unit would be responsible for keeping the register. CSP(N) added that unreported suspicious money laundering transactions could be identified in the course of their routine investigations.

16. Regarding the effectiveness of the enforcement work, Principal Assistant Secretary for Security (Narcotics) (PAS(S)N) said that the notification requirements would enable the Administration to keep a comprehensive and up-to-date register on money changers and remittance agents. The new requirements would be implemented in conjunction with some corresponding administrative arrangements which were under active consideration. At present, the administrative guidelines issued by the Police to money changers and remittance agents were considered effective only to a limited extent. Prior to the issue of the administrative guidelines, about 25% of these institutions kept some information on their customers and transactions. Although the proportion of such institutions rose to 80%, the types and amount of details kept varied greatly from one institution to another. She added that future enforcement work would be enhanced by accompanying administrative guidelines, visits by enforcement agencies and education for the industry.

17. Mrs Selina CHOW commented that paragraph 9(e) of the information paper did not spell out clearly whether it was an offence for non-compliance with the requirements and what penalty would be imposed. She requested the Administration to review whether the proposed regulation on remittance agents was adequate. Mr Albert HO concurred with Mrs CHOW.

Implementation of FATF's recommendations

18. Noting that there were discrepancies between Recommendation Nos.11 and 12 of FATF for regulation of money changers and remittances agents and the Administration's legislative proposals, Mr Andrew CHENG enquired about the reasons for not following strictly FATF's recommendations. Regarding the implementation of Recommendation No. 12 of FATF, Com for N said that in line with the practice in financial institutions in Hong Kong, money changers and remittance agents were required to keep records on their customers and transactions for a period of time. The industry had been consulted and had no objection to the proposals.

Operation of remittance agents

19. In response to Mr Albert HO's enquiry about the operation of remittance agents, CSP(N) said that a remittance agent usually requested its customer to buy a bank draft payable to the remittance agent. Thus, even the bank observed closely the guidelines issued by the Hong Kong Association of Banks, it was unable to have further information on the identity of the beneficiary in the transaction. There was a missing link in conducting investigations into suspicious transactions. Nevertheless, the Administration was aware of the existence of various remittance agents through such transactions.

20. Com for N added that financial institutions in Hong Kong, including banks, securities and insurance companies, followed closely the administrative guidelines issued by their respective financial regulators. FATF expressed satisfaction at these administrative guidelines after conducting a detailed examination of Hong Kong's anti-money laundering regime in 1998. Only the lack of specific anti-money laundering regulations for the money changers and remittance agents were considered insufficient for the enforcement agencies to carry out enforcement actions. The anti-money laundering proposals were therefore drawn up. It, however, did not necessarily mean that money changers and remittance agents were already heavily engaged in money laundering activities.

Definition of remittance agent

21. Mr Albert HO asked whether any persons occasionally engaged in remittance transactions were within the meaning of remittance agent under the legislative proposals; if so, he considered that the Administration was unable to be aware of their existence unless there was a licensing system. The Chairman further asked whether the making of any remittance transactions not in the course of business would also be regulated under the legislative proposals. Com for N said that currently, it was proposed that all persons engaging in remittance business, regardless the frequency of transactions engaged, were within the meaning of remittance agent. She added that the Administration had no plan for introducing a licensing system for remittance agents at the moment. The legislative proposals were to impose statutory requirements on non-bank financial institutions which carried on money changing or remittance businesses. The new requirements were considered simple and easy to enforce and yet sufficient for combating money laundering as it provided an audit trail of the businesses or transactions conducted.

22. Mrs Selina CHOW opined that having regard to the large amount of money dealt with by the remittance industry, a clear definition of remittance agent should be provided in the legislation.

23. Mr Albert HO expressed concern about the latest trend on money exchange arising from the frequent business transactions between Hong Kong residents and the Mainlanders. It was a common phenomenon that Hong Kong residents exchanged Hong Kong dollars for Renminbi by paying money to someone in Hong Kong and collected the exchanged amount in the Mainland and vice versa without resorting to money changers or remittance agents. The identities of customers and details of transactions were unidentifiable. PAS(S)N said that the primary objective of the proposals was to introduce requirements for money changers and remittance agents to adopt anti-money laundering measures, rather than to regulate the operation of money changers and remittance agents, having regard to the fact that money changers and remittance agents had been found to have been involved or being used as a conduit in money laundering. The current thinking was that the statutory requirements would be imposed on all persons carrying on money changing or remittance businesses but the Administration could fine-tune the proposals having regards to Members' views.

Licensing system for remittance agents

24. Mr CHEUNG Man-kowng remarked that the proposals would be unenforceable if the Administration did not introduce a licensing system for remittance agents simultaneously. It was likely that a culprit would not notify the relevant authorities of their existence. He considered that it was difficult for the enforcement agencies to identify their existence. He said that the Administration should spell out clearly in the legislation under what circumstances, such as the transaction amount and the number of transactions, should a remittance agent be required to register with the relevant authorities. PAS(S)N reiterated that under the proposed legislation, it would be an offence to engage in money changing or remittance businesses without notifying the relevant authority. Having regard to Members' concerns, the Administration would review the proposed penalty.

25. Mr CHEUNG Man-kwong stressed that the effectiveness of enforcing the new requirements depended very much on the introduction of a corresponding licensing system. He enquired about the difficulties of introducing a licensing system for the money changing or remittance trade.

26. The Chairman said that members expressed serious concern about the lack of a licensing system for effective implementation of the new statutory requirements. He requested the Administration to futher consider members' views. The Chairman also urged the Administration to take note of the unreported money exchanging transactions arising from the frequent business transactions between Hong Kong and the Mainland and consider whether such transactions were within the meaning of money changers or remittance agents who were required to report their transactions to the relevant authorities under the legislative proposals. The Administration might also consider consulting the Mainland enterprises in drawing up the proposals.

27. In response, Com for N undertook to provide more background information for not introducing a licensing system. She pointed out that in drawing up the proposals, the Administration had made reference to overseas experience. For example, money changers and remittance agents were not required to obtain licences for operation in the United Kingdom. They were regulated under the law by means of keeping a similar register. Com for N said that the implementation of a licensing system would incur additional manpower for carrying out enforcement actions. Other factors such as what kinds of activities would be included, when and under what circumstances would a remittance agent or money changer need to obtain a licence, etc. had to be taken into account.

Adm

IV. Replacement of Police Launches
(LC Paper No. CB(2) 1374/98-99(03))

Briefing by the Administration

28. Principal Assistant Secretary for Security E (PAS(S)E) briefed members on the overall Marine Police launches replacement programme. The programme aimed to ultimately replace the existing 35 patrol launches because it would not be cost-effective to continue maintenance beyond their life expectancy of around 18 to 22 years.

29. PAS(S)E said that the first batch of the vessels to be replaced was the six Damen Mark I launches. The six replacement launches would have enhanced speed and be equipped with advanced technological facilities. The Administration would seek the approval of the Finance Committee (FC) for procuring these six launches in the current legislative session. Subject to the result of the tender exercise for the procurement, the non-recurrent cost was estimated to be about $294.84 million.

Discussion

Effect of enhanced speed of replacement launches on immigration control

30. Mr CHEUNG Man-kwong asked whether the enhanced speed of replacement launches could facilitate the discharge of Marine Police's duty of anti-illegal immigration. In this connection, he wondered whether the speed (25 knots) of these launches was comparable to that of the vessels used for smuggling illegal immigrants (IIs).

31. Regional Commander Marine of Hong Kong Police Force (RCM) responded that small vessel with speed of 35 to 40 knots which was carried on board the launch could be used for fast-speed pursuit. For this purpose, the Marine Police also had vessels with maximum speed of 50 knots and would procure vessels with maximum speed of 60 knots. In fact, enhancing the speed of the patrol launches to any higher level would be very expensive.

32. PAS(S)E added that other measures to combat illegal immigration such as maintaining close liaison with the Mainland authorities in a bid to tighten frontier patrol and beat patrol were in place. Besides anti-illegal immigration, the replacement launches would be used for other duties of the Marine Police such as maritime safety, conservancy and maritime law enforcement.

Price of replacement launches

33. The Chairman asked whether the estimated unit price of the replacement launches was value for money and whether offering a bulk purchase contract would attract a more competitive tender price. RCM responded that the purchase price of these launches was subject to the result of a tender exercise which was open to interested parties world-wide. A more competitive price might be offered if the tender also included the second batch of launches due for replacement later. Nevertheless, the technological advancement might enable launches with more advanced technological facilities to be offered at a cheaper price. Also, replacement in a phased manner would allow the Marine Police to keep pace with technological advances, to properly assess the new launches before placing further orders and to review their current and future operational needs.

Inflation rate used in calculating cost of launches

34. Mr LEE Cheuk-yan asked whether -

the annual inflation of 8% used in the calculation of cost for the replacement launches (Annex B to the paper) was outdated; and
the Administration had made reference to past procurement of similar vessels in the calculation.

35. PAS(S)E's response was as follows -

as the launches were manufactured overseas, the Administration had to take into account the inflation rate in overseas countries; and
as set out in paragraph 11 of the paper, the Administration had made reference to the funding proposal approved by FC for the Customs and Excise Department to procure two patrol launches in December 1996 with a unit price similar to that of the replacement launches.

He stressed that the procurement cost set out in the paper was an estimate only and was subject to the result of an open tender.

36. The Chairman remarked that the estimated cost was the upper limit of the procurement cost. He said that as the replacement of patrol launches was necessary from the security point of view, the Panel was in support of the proposal.

V. Immigration Service Training School and Perowne Immigration Centre
(LC Paper No.CB(2)1374/98-99(04))

Briefing by the Administration

37. Principal Assistant Secretary for Security D (PAS(S)D) said that the information paper presented the Immigration Department's (ImmD's) proposal to construct a permanent Immigration Service training school and an Immigration processing centre with detention facilities at part of the ex-military site of Perowne Barracks, Castle Peak Road, Tuen Mun.

38. PAS(S)D explained the need for the proposed construction project as follows -

Training school

ImmD was presently using, on a temporary basis, the facilities being left behind by the British Army at the Perowne Barracks for induction and in-service training. These training facilities were outdated and inadequate. ImmD also had to share the drill ground, gymnasium, and other facilities with other users. Such provision of facilities incurred problems in the deployment of resources and had an adverse effect on the morale and sense of belonging of both the training staff and the trainees. Immigration processing centre
At present, there were no dedicated facilities for housing immigration offenders pending removal. They were kept at the Victoria Immigration Detention Centre (VIC) inside the Victoria Prison (VP). VP did not only house immigration detainees but also inmates convicted of other criminal offences. Correctional Services Department (CSD) planned to take back VIC to alleviate the overcrowdedness in penal institutions. Owing to the limited capacity of VIC, ImmD had to release some detainees in excess on recognisance. Some of them had absconded. Extra resources had to be deployed to locate these absconders. To improve the situation and to lighten the strain imposed on the Immigration resources, construction of a separate Immigration processing centre was essential. The processing centre for housing 400 immigration detainees would replace the existing VIC and provide adequate facilities to cope with the existing operational need. The proposal of constructing the training school and the processing centre on the same site would provide a more flexible deployment of staff. It would also facilitate mobilization of staff to the processing centre in emergencies.Recruitment centre
For operational efficiency and to optimise site utilization, it was also proposed to reprovision the Recruitment Section of ImmD to the new school site. The Recruitment Section was under the line management of the Immigration Service Training School.

39. PAS(S)D pointed out that the Administration had consulted the Tuen Mun Provisional District Board which supported the proposal in principle. The project capital cost was subject to further refinement at a later stage. The Administration intended to submit the proposal to the Public Works Sub-committee (PWSC) and FC for funding approval for partial upgrading to Category A for pre-contract consultancy design services in April and May 1999 respectively. It was expected that the Immigration processing centre would be in place in early 2003 and the Immigration Service training school in early 2004.

Discussion

Contingency cost

40. Referring to the financial implications, Mr CHEUNG Man-kwong was concerned about the high cost for contract and project contingencies which represented over 15% of the project capital cost. Deputy Director of Architectural Services (DDArchS) was of the view that the project and contract contingencies were to cater for unforeseen expenses by the users and in a contract respectively. A contingency cost of over 15% of the project capital cost was on the high side. The project contingencies might be reduced when the item was submitted to PWSC for funding approval as the user requirements might be finalized by then.

41. Mr CHEUNG Man-kwong remarked that from his experience in examining public works projects, the contingency cost was always on the high side. Noting that consultant fees were provided for in the project capital cost, he asked why an accurate estimate of the cost could not be made with the engagement of consultants. DDArchS explained that consultants would be engaged after approval was granted for the present funding application which sought to secure funds for part of the consultant fees for design services up to the tender stage. The project capital cost would be more accurate at that stage. The cost set out in paragraph 17 of the paper was only a rough estimate worked out on the basis of the floor area to be provided by the project and on the assumption of no design elements therein.

Staff cost

42. Referring to paragraph 18 of the paper, Mr CHEUNG Man-kwong enquired about the reasons for the some $43 million additional annual staff cost ($78,990,942 less $35,469,521 savings from superseded building/asset) for the training school, Immigration processing centre and recruitment office. He remarked that the only change involving staff implications from the project was the creation of 100 additional places in the Immigration processing centre vis-a-vis VIC.

43. PAS(S)D explained that the savings in staff cost referred to the staff costs for ImmD to manage the existing training school, processing centre and recruitment office. Additional staff were required to run the new Immigration processing centre which would have more places to house immigration detainees than the existing one. Regarding the staffing requirement for the training school, Assistant Director of Immigration (Administration and Planning) said that, in addition to the existing staff number of some 30, 22 more staff would be required. The increase was necessary due to an increasing demand for training for existing staff and new recruits given the resumption of recruitment at the Immigration Officer rank from 1997. As regards staffing requirement for the Immigration processing centre, Assistant Director of Immigration (Liaison and Support) (AD of Imm (Liaison & Support)) said that the estimated additional staffing was 199. In drawing up the staffing proposal, ImmD had made reference to the staffing of CSD which deployed 182 staff to man VIC round the clock. In response to the Chairman's enquiry, PAS(S)D said that the additional posts would be created through normal channel. Mr CHEUNG Man-kwong queried the need for the additional staff for the training school which represented about two-third of the original staffing. He also asked whether the 182 CSD's staff managing VIC would still be required after the transfer of VIC's work to the new centre.

44. Regarding the savings of staff cost of $35,469,521 from superseded building/asset, AD of Imm (Liaison & Support) said that the staff cost included cost of the existing 32 staff of the training school, 16 staff of the Recruitment Section and of 70 ImmD's staff worked in VIC who were responsible for handling administrative matters related to repatriation, appeal and petition but not the management of immigration detainees. Extra manpower would therefore be required if ImmD also took up the management duties. The Chairman requested and PAS(S)D agreed to provide a breakdown of the staff cost set out in paragraph 18 of the paper and details of the staff cost of the 182 CSD's staff for managing VIC.

Adm

45. Mr CHEUNG Man-kwong and Mrs Selina CHOW were concerned about the capital and recurrent costs of the project. Mr CHEUNG doubted whether a more accurate estimate could be made in time for submitting the funding proposal to PWSC for consideration in April 1999. Mrs Selina CHOW pointed out that the estimated project cost set out in the paper was based on December 1997 prices and therefore might differ from that calculated at today's price. She opined that PWSC should be informed that these cost estimates had not been examined by the Panel. Mr CHEUNG Man-kwong said that he would examine the project from the policy as well as value-for-money point of view. A generally accurate cost estimate was therefore necessary.

46. PAS(S)D stressed that an accurate cost estimate could not be provided as consultants had not been engaged for the project design services pending approval of this funding application. DDArchS added that the funding submission to PWSC would provide more details on the project cost. Whilst a more accurate cost estimate would be available after completion of project design by consultants, the project capital cost would be about $18,000 for each square metre of constructed floor area.

47. Noting that ImmD had an establishment of about 5 600, the Chairman said that he supported in principle a training school to be built for ImmD given that CSD with an establishment of some 6 000 was provided with a training school. The Administration should address members' concerns on the project, e.g. whether the school was of an appropriate size. Mrs Selina CHOW also supported in principle the construction of a training school for ImmD. She, however, considered that the project capital and recurrent costs were on a high side. She requested for more details and justifications on these costs.

48. In concluding the discussion, the Chairman suggested that the Administration's submission to PWSC should address the Panel's general concern of whether the project was value for money and cost effective. In particular, the following should be included in the submission -

the Administration's response to members' concerns raised at the Panel meeting;
the respective breakdown of project cost estimate and staff cost for the Immigration training school and the Immigration processing centre. In this connection, justifications should be given for the 199 additional posts arising from the new training school; and
the percentage of alleviation of overcrowdedness in penal institutions with the return of VIC to CSD.

49. The meeting ended at 4:40 pm.

Legislative Council Secretariat
20 April 1999